You plan to borrow $15,000 for 3 years. The interest rate is 8% compounded semi-annually. The...

You plan to borrow $15,000 for 3 years. The interest rate is 8% compounded semi-annually. The terms require you to amortize the loan with equal payments made every period. a) Calculate the amount of payment you would be paying every period? b) Set-up an amortization schedule

Solutions

Expert Solution

Solution :-

Interest Rate For Semiannual Period = 8% / 2 = 4%

Amount of Loan = $15,000

Term = 3 Years

Total Semiannual Installment = 3 * 2 = 6

Value of Installment = $15,000 / PVAF ( 4% , 6 )

= $15,000 / 5.242

= $2,861.43

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jeff jeffy answered 1 year ago

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